Dollar up ahead of Fed minutes


(MENAFN- AFP)The dollar continued its discreet recovery on Wednesday, lifted by expectations that the American central bank is shifting towards tightening monetary policy quickly, dealers said.

All eyes were on the publication of minutes, scheduled for later Wednesday, of the latest Federal Reserve meeting which Fed watchers will dissect in their search for insights into the central bank's thinking.

All things being equal, higher interest rates bolster the dollar as holding the currency becomes more attractive.

Barring any surprises in the minutes, "the greenback could be on the verge of a more significant comeback," predicted Fawad Razaqzada, an analyst at Forex.com.

The dollar stood comfortably firm against the euro and the yen, but much higher against the pound sterling which dropped after Britain reported rising unemployment.

The weaker pound, in turn, boosted London stocks, with the FTSE the only key European index posting gains.

Frankfurt and Paris meanwhile both struggled "after a string of disappointing" eurozone manufacturing numbers, noted Connor Campbell, financial analyst at Spreadex trading group.

The share prices of mining giant Glencore and Lloyds Banking Group (LBG) enjoyed solid gains following well-received earnings updates.

Glencore reported bumper 2017 profits on Wednesday and announced a higher-than-expected dividend payout.

Benefiting from rebounding commodities prices, the Swiss-based company said its net profit last year hit $5.7 billion (4.6 billion euros), a fourfold increase compared with 2016.

LBG's profit after tax soared 52 percent last year, when the UK lender returned fully to the private sector following a state bailout.

Wall Street started its trading session with slight gains.

- Fed minutes -

Later on Wednesday, the Fed minutes will be closely scrutinised for clues about the pace of US interest rates expected this year.

Stephen Innes, head of Asia-Pacific trading at OANDA, said that "while the prospect of higher interest rates will keep investors on edge, it's not like we're returning to double-digit levels".

Elsewhere, both main oil contracts were lower as a stronger dollar hit recent gains for crude.

Dealers were awaiting the release of oil stockpiles data from industry group American Petroleum Institute due Wednesday.

- Key figures around 1430 GMT -

London - FTSE 100: UP 0.2 percent at 7,263.85 points

Frankfurt - DAX 30: DOWN 0.3 percent at 12,446.58

Paris - CAC 40: DOWN 0.1 percent at 5,283.11

EURO STOXX 50: DOWN 0.5 percent at 3,423.05

New York - DOW: UP 0.1 percent at 24,974.94

Tokyo - Nikkei 225: UP 0.2 percent at 21,970.81 (close)

Hong Kong - Hang Seng: UP 1.8 percent at 31,431.89 (close)

Shanghai - Composite: Closed for public holiday

Euro/dollar: DOWN at $1.2326 from $1.2336 at 2200 GMT

Pound/dollar: DOWN at $1.3941 from $1.3995

Dollar/yen: UP at 107.40 yen from 107.32 yen

Oil - Brent North Sea: DOWN 33 cents at $64.93 per barrel

Oil - West Texas Intermediate: DOWN 40 cents at $61.39

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AFP

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